In a legal system that draws on precedent, legal commentators can be sucked into writing about a particular case again and again all too easily. In my case, this has happened with the Salvesen v Riddell saga, which I have blogged about here, here, here, here, here and here, with further contributions available in two editions of the Scots Law Times.
Today (as reported by Scottish Legal News), the Scottish Parliament hopes to put a full stop to the passage that began in the run-up to the Agricultural Holdings (Scotland) Act 2003 and came to a head in the UK Supreme Court just under one year ago. It does this by providing a mechanism to end the preferential treatment of “upgraded” agricultural tenants, by which I mean the general partners of limited partnership tenancies that the 2003 Act tried to benefit.
To (very quickly) explain, it used to be common to set up limited partnerships as farm businesses in rural Scotland. The general partner would be the active farmer, the limited (financially insulated) partner would be the landowner or a connected party, and the landowner would grant that limited partnership a tenancy of the land. In the uncertainty leading up to the 2003 Act, some landowners decided to bring an end to their limited partnership arrangements. As finally enacted, the 2003 Act gave affected general partners, namely those who were served notices of dissolution (or equivalent) in a defined time period, the chance upgrade to full “1991 Act” tenants. This was an important upgrade, because a 1991 Act tenancy provides the all important concept of security of tenure – i.e. the ability to stick around even after the expiry of lease, provided the tenant had been diligent enough to pay rent when due and look after the land properly. It was also an important upgrade because the whole limited partnership thing was in fact designed to avoid the whole security of tenure thing, hence the imposition of the whole security of tenure thing was a bit of a surprise to some landlords.
This upgrade was held to be a breach of the landlord’s rights under A1P1 of the ECHR – or the property provision of the European Convention on Human Rights, for those who don’t speak in acronyms. This breach was all the more apparent when the position of an affected landlord was compared to landowners affected by the regime relating to tenants after the defined time period, which landlords were not lumped with potentially perpetual tenants. The Supreme Court gave Holyrood a year to fix matters, hence today’s Scottish Government announcement, as follows:
The Remedial Order is estimated to apply to fewer than 25 cases and comes into force tomorrow (Thursday April 3, 2014).
Cabinet Secretary for Rural Affairs and Environment Richard Lochhead said:
“This has been an extremely complex legal case that has led to a great deal of uncertainty hanging over part of the tenant farming sector – although, thankfully, the number of cases involved is much smaller than originally thought.
“I am fully aware of the stress this has caused and hope that the passing of this Order provides clarity to those who have been waiting for answers and whose lives have been put on hold whilst this has been pending…
“In order to help reach fair and balanced outcomes, the Scottish Government is funding independent mediation for the small number of landlords and tenants affected and I urge all affected parties to take up this offer.”
Notes to editors
The new legislation means:
• Full 1991 agricultural tenancies created under the defective legislation are no longer guaranteed to be available for those who had their limited partnership dissolved during the period September 16, 2002 – June 30, 2003.
• In cases where full 1991 agricultural tenancies were so created, affected landlords will have the option of converting to a tenancy held under section 73 of the Agricultural Holdings (Scotland) Act 2003. This type of tenancy allows landlords, if they wish, to recover vacant possession following a three year notice period.
• The introduction of a cooling off period, lasting until November 28, 2014, during which time affected full 1991 agricultural tenancies cannot be converted.
• Any affected landlord wishing to convert to a section 73 tenancy must serve notice of this by November 28, 2015. If no action is taken, the tenancy will remain a full 1991 agricultural tenancy.
• The Rural Affairs Secretary has already stated his intention to exclude this group of tenancies from absolute right to buy should such a measure be brought in for 1991 agricultural tenancies in future – an issue which is currently being considered by the Ministerial-led review of Agricultural Holdings Legislation.
• Plain English guidance explaining the changes is being prepared and will be available shortly.
All understood? Good. And good luck to the civil servants drafting the plain English guidance. If I was to have a go myself, I would probably opt for, “general partners who thought they were getting an upgrade because a landowner tried to end a farming limited partnership between 16 September 2002 and 30 June 2003 are now treated roughly the same as any tenants with a landowner that acted after 30 June 2003.”
One final point. In the comments to a post on this topic last year, I supposed this might affect a hundred or so cases. The Scottish Government today suggests the figure is as low as 25. Whilst that may be a low number, and this may seem like an awfully complicated way to deal with things, if human rights mean anything the numbers and the complexity matter not a jot. A society that cares about human rights ought to do all it can to ensure those rights are respected in all circumstances.